GAP insurance pondering

[roystinho]

I know exactly what it is, but what I want to know is if anyone has come a cropper for not getting it?

I'm buying a new car and they have to offer it, which I declined, as regular insurance pays market value so should be able to replace if I got into a total loss situation. But has anyone (either you or someone you know) not been able to get a replacement car?

I've bought brand new cars before and have never bothered, it just made me think about it...

[MR2 Steve]

Have a look at Frank Pickles. The minimal cost makes it a no brainer really when compared to the mark up a dealer charges.

[Sheepshanks]

Or look at ALA - PH sponsors, offering a discount.

[Ozzie Osmond]

roystinho said:

I know exactly what it is, but what I want to know is if anyone has come a cropper for not getting it?

1. Cars depreciate. I can't see any point trying to insure depreciation!

2. However, sometimes when a car is stolen there may be more money owing on finance or whatever than the value of the car at the time it is lost. Gap insurance will usefully make good the difference under those circumstances.

[silentbrown]

IMO, any insurance which claims to put you in a better position AFTER an incident than you were in before is, basically, gambling and/or an invitation to fraud

However, I took out gap insurance on my new car last year with this lot. https://totallossgap.co.uk/

If your car's written off in the first 12 months, most insurers will replace with new anyway - but as my car was a heavily discounted 'run-out' Audi S4, replacement wasn't going to be possible. The gap insurance means - should the worst happen - I'll get a shiny B9 S4 to replace the B8 one.

Also, plenty of tales of endless haggling with insurers about what constitutes 'market value' which Gap insurance basically sidesteps.

There was someone who had a leased Golf R (surprise!) stolen. I think he came a cropper over losing the 9? 6? month 'initial payment', which *some* Gap policies can now cover.

Edited by silentbrown on Friday 19th August 13:49

[SystemParanoia]

so you're essentially insuring your insurance?

[Joe..]

Ozzie Osmond said:

1. Cars depreciate. I can't see any point trying to insure depreciation!

2. However, sometimes when a car is stolen there may be more money owing on finance or whatever than the value of the car at the time it is lost. Gap insurance will usefully make good the difference under those circumstances.

GAP insurance pays back to invoice - so in a way, you are insuring depreciation? - I've often thought this must leave it open to fraud...

[Ozzie Osmond]

SystemParanoia said:

so you're essentially insuring your insurance?

No

[Dave Hedgehog]

Girl at work bought a shiny new 2 series taking the excellent stock PCP deal, paint protection, GAP insurance etc.

12 months in and she was rear ended and then car written off (rear wheel was in passenger door)

As bad as the stock dealer deal was she would have been screwed without the GAP insurance

[Dave Hedgehog]

SystemParanoia said:

so you're essentially insuring your insurance?

You are insuring against a difference in the value the insurance company pays you and what you have left on the finance, in the early stages when cars depreciate a lot but you have paid very little back it can be a huge amount

[silentbrown]

Dave Hedgehog said:

12 months in and she was rear ended and then car written off (rear wheel was in passenger door)

Up to 12 months, standard insurance policy will normally replace with new, as long as you own the car. With PCP, you don't, of course.

[roystinho]

Thanks, for £120 it is a no brainer. Never knew you could set up another policy with someone else.

[Dave Hedgehog]

silentbrown said:

Dave Hedgehog said:

12 months in and she was rear ended and then car written off (rear wheel was in passenger door)

Up to 12 months, standard insurance policy will normally replace with new, as long as you own the car. With PCP, you don't, of course.

Or 14 months or 18 months

You never have to worry about having to pay for a car that no longer exists

If you take RTI you will actually be more ahead the older the car gets as you can get the full value (depending on the policy) of the car back from the GAP insurance, theoretically you could be looking at being 25k ahead

Edited by Dave Hedgehog on Friday 19th August 13:57

[Sheepshanks]

silentbrown said:

Up to 12 months, standard insurance policy will normally replace with new, as long as you own the car. With PCP, you don't, of course.

If it's on PCP or HP then replacement normally works. It's leasing where generally the deal is terminated on write off.

[CaptainCosworth]

Joe.. said:

Ozzie Osmond said:

1. Cars depreciate. I can't see any point trying to insure depreciation!

2. However, sometimes when a car is stolen there may be more money owing on finance or whatever than the value of the car at the time it is lost. Gap insurance will usefully make good the difference under those circumstances.

GAP insurance pays back to invoice - so in a way, you are insuring depreciation? - I've often thought this must leave it open to fraud...

Not sure how it's open to fraud? I had the benefit of claiming on GAP insurance a few years ago. Paid £10k for a car which was written off 2 1/2 years later. Insurance paid out market value (£6.5k) and the GAP insurer paid out £3.5k. Other than a bit of middle-man negotiation by me between the 2 insurance companies over the market value I can't see any potential for fraud?

For the sake of about £200 I would always take out GAP insurance. In the case above it meant I had £10k to go and get a replacement car. Yes, I could have got like-for-like with £6.5k, but in reality it won't be like for like. I'd bought my £10k car when it was a year old (so only a year of 'unknowns'), whereas a £6.5k like-for-like would have had 3 1/2 years of 'unknowns'.

[Sheepshanks]

It obviously makes a lot of sense if you ever claim!

However you can tell how rare that is from how cheap the premiums are and even £200 sounds a lot - reasonable cover on a new car can be had for not much over £100.

[silentbrown]

CaptainCosworth said:

Not sure how it's open to fraud?

You were paid £10K for something worth only £6.5K. Less scrupulous folk than you would be looking for ways to have their car written off, pay £6.5K for a similar vehicle and have £3.5K "profit".

[CaptainCosworth]

silentbrown said:

CaptainCosworth said:

Not sure how it's open to fraud?

You were paid £10K for something worth only £6.5K. Less scrupulous folk than you would be looking for ways to have their car written off, pay £6.5K for a similar vehicle and have £3.5K "profit".

Fair enough, I'm sure it must happen but can't be that common (ie. my GAP insurer would need to have sold another 17 policies which don't pay out to just break even against my claim).

[seders]

Sorry if I'm late to the party...

The job I do entails dealing with many total losses per week and I'd say only 50% of them have GAP.

The ones that do are relieved they have it and the ones that don't are usually left blaming everyone else.

"What do you mean the car I paid £10k for 2 years ago is only worth £3.50 now?"

For the sake of a couple of hundred quid it's not worth the potential headache of not having it.

[silentbrown]

seders said:

"What do you mean the car I paid £10k for 2 years ago is only worth £3.50 now?"

Is that because they don't understand depreciation, or because they're disputing the assessment of the market value?